Bipartisan bill would give government workers access to retirement funds amid shutdown

Bipartisan bill would give government workers access to retirement funds amid shutdown
© Greg Nash

A small, bipartisan group of House members on Tuesday introduced a bill that would allow federal workers affected by the partial government shutdown to withdraw funds from their retirement accounts without penalty.

If passed, the bill would allow workers to draw down funds from retirement accounts without having to pay the usual 10 percent fee.


“Families of federal employees should not become casualties of partisan politics in Washington,” said Rep. Pete OlsonPeter (Pete) Graham OlsonHouse Republicans who didn't sign onto the Texas lawsuit Republican Fort Bend County Sheriff wins Texas House seat 10 bellwether House races to watch on election night MORE (R-Texas), one of the bill’s sponsors. “This simple adjustment will allow them to access funds to provide financial stability during a stressful period they have no control over.”

Some 800,000 federal workers are either furloughed or working without pay as a result of the shutdown, now in its 25th day. They missed their first full paycheck on Friday after receiving a slightly reduced one in late December.

While both chambers already passed legislation guaranteeing that federal worker would be compensated in full once the shutdown ends, many workers are struggling to pay bills on time. With no end in sight, their financial woes could get deeper as bill collectors lose patience and additional paychecks remain unsent.

“The only way to fully stop the damage being done by this shutdown is to reopen the government, but until that happens Congress should do everything in its power to help federal workers who are affected,” said Rep. Don Beyer (D-Va.).

The law would also apply to contractors whose sole income comes from their federal contracts. Contractors are not guaranteed back pay once the shutdown ends.

In the Senate, Republicans this week proposed an alternative bill to pay those federal workers who are forced to continue working even before the shutdown ends because they are deemed “essential.” That bill would not apply to furloughed workers or contractors. 

It aims, in part, to address the problem of disgruntled unpaid workers in agencies such as the Transportation Security Administration calling in sick at increased rates, which has led to long lines and delays at some airports.